Correlation Between Loads and Engro
Can any of the company-specific risk be diversified away by investing in both Loads and Engro at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Loads and Engro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loads and Engro, you can compare the effects of market volatilities on Loads and Engro and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Loads with a short position of Engro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loads and Engro.
Diversification Opportunities for Loads and Engro
Very good diversification
The 3 months correlation between Loads and Engro is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Loads and Engro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Engro and Loads is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Loads are associated (or correlated) with Engro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Engro has no effect on the direction of Loads i.e., Loads and Engro go up and down completely randomly.
Pair Corralation between Loads and Engro
Assuming the 90 days trading horizon Loads is expected to generate 1.07 times less return on investment than Engro. In addition to that, Loads is 1.19 times more volatile than Engro. It trades about 0.24 of its total potential returns per unit of risk. Engro is currently generating about 0.3 per unit of volatility. If you would invest 30,943 in Engro on October 26, 2024 and sell it today you would earn a total of 17,595 from holding Engro or generate 56.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 79.03% |
| Values | Daily Returns |
Loads vs. Engro
Performance |
| Timeline |
| Loads |
| Engro |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Loads and Engro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loads and Engro
The main advantage of trading using opposite Loads and Engro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loads position performs unexpectedly, Engro can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Engro will offset losses from the drop in Engro's long position.| Loads vs. Crescent Star Insurance | Loads vs. Packages | Loads vs. Shaheen Insurance | Loads vs. Crescent Steel Allied |
| Engro vs. Askari General Insurance | Engro vs. Pakistan Reinsurance | Engro vs. Reliance Insurance Co | Engro vs. Universal Insurance |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Transaction History module to view history of all your transactions and understand their impact on performance.
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